New Delhi: Rising costs, tighter credit, and an aggressive push into artificial intelligence infrastructure are colliding for Oracle. A new report says the software major is preparing some of the largest job cuts in its history as it struggles to fund massive AI data centre expansion plans.
The development highlights how even long-established technology giants are feeling the pressure of today’s expensive money environment. As borrowing becomes costlier and lenders turn cautious, companies racing to build AI infrastructure are being forced to rethink how they spend and where they find capital.
Oracle may cut up to 30,000 jobs to free cash
According to a report by CIO citing investment bank TD Cowen, Oracle is preparing to slash between 20,000 and 30,000 jobs. The potential layoffs could free up $8 billion to $10 billion in cash, money the company “urgently needs right now.”
TD Cowen said Oracle is facing mounting pressure as US lenders pull back from financing its AI infrastructure projects, pushing the company toward drastic cost-cutting.
“Both equity and debt investors have raised questions regarding Oracle’s ability to finance this buildout,” TD Cowen said in its report, according to CIO.
Oracle has not issued a public statement on the reported layoffs.
Borrowing costs surge as banks step back
TD Cowen estimates Oracle’s infrastructure commitments now require around $156 billion in capital spending. That figure has reportedly alarmed both equity and debt investors.
Several US banks, once keen to back Oracle’s rapid data-centre rollout, have stepped back. As a result, lenders have nearly doubled the interest rate premiums they charge Oracle since September, the report said. This jump has already stalled multiple projects.
“Multiple Oracle data-centre leases under negotiation with private operators struggled to secure financing,” TD Cowen noted.
The financing pressure is also tied to Oracle’s earlier commitment to build data centres for OpenAI, a project TD Cowen pegs at around $156 billion.
Possible Cerner sale and unusual funding ideas
To ease the strain, Oracle is also exploring strategic options, including a possible sale of Cerner, which it bought for $28.3 billion in 2022. Selling Cerner would mark a major shift, since Oracle had positioned the business as central to its healthcare cloud strategy.
The company is also testing unconventional approaches:
- Asking clients to contribute directly to infrastructure projects
- Exploring a “bring your own chip” (BYOC) model where customers supply their own hardware
Both moves would push some capital costs away from Oracle’s balance sheet.
High-stakes AI and cloud race
The timing is critical. Oracle is competing with cloud heavyweights such as Amazon, Microsoft, and Google in the global AI and cloud race. That battle demands constant, large-scale investment.
Oracle reportedly still aims to raise $45 billion to $50 billion in 2026 to build more cloud capacity. But with lenders retreating and costs rising, the company may have to rethink how it funds its AI ambitions.